By Ron Bousso and Ahmed Aboulenein
LONDON (Reuters) - Brent crude oil rose on Monday to above $71 a barrel, recovering from a five-year low it hit earlier as investors looked for a price floor after last week's OPEC decision not to cut production.
U.S. crude and Brent have fallen for five months in a row, oil's longest losing streak since the 2008 financial crisis.
Brent hit a low of $67.53 a barrel, the lowest since October 2009, before rising 85 cents to $71.00 a barrel by 1454 GMT. U.S. crude was up $1.01 at $67.16 a barrel, having slipped to an intraday low of $63.72, the lowest since July 2009.
"The market is still very much in panic mode," said Energy Aspects' chief oil analyst Amrita Sen. "Once we get over the panic, Brent prices will probably stabilise at around $65-80 a barrel in the short term."
"We can expect such volatility in the near future given the market had overshot to the downside," Sen said.
Saudi Arabia, the most influential member of the Organization of the Petroleum Exporting Countries blocked moves by some smaller producers to curb oil output in response to huge oversupply in world markets.
Oil lost more than 12 percent after OPEC's decision last Thursday.
Data suggested the new price environment has hit fast-growing U.S. shale oil production, the main driver of global production growth in recent years, with a 15 percent drop in permits for new wells in November.
"The market is still looking for a new equilibrium below $70 (a barrel), which is a little surprising given that with the current prices much of the shale oil production in the U.S., or part of it, will be unprofitable," Commerzbank analyst Eugen Weinberg said.
With oil prices down about 40 percent since June, the impact is being felt around the world as oil producers from Iraq to Nigeria revise 2015 budgets to reflect lower prices.
Slower-than-expected growth in China's manufacturing sector may add further downward pressure on oil.
"In the fourth quarter, oil markets have lost the support of both the invisible hand of the U.S. Fed and OPEC," Petromatrix analyst Olivier Jakob said, referring to the Federal Reserve's move to phase out monetary stimulus for the U.S. economy.
(Additional reporting by Florence Tan in Singapore; Editing by David Goodman, William Hardy and David Clarke)